article thumbnail

CEOs Don’t Care Enough About Capital Allocation

Harvard Business Review

” A quarter century later, not much seems to have changed: fewer than five out of the 100 CEOs on HBR’s 2014 list of best-performing CEOs even mention “return on capital” on their official biography — and none of those five lead companies listed in the Dow Jones Industrial Average (DJIA) or in the EuroStoxx50.

CEO 8
article thumbnail

How Banks Can Compete Against an Army of Fintech Startups

Harvard Business Review

As JPMorgan Chase’s CEO, Jamie Dimon, warned in a June 2015 letter to the bank’s shareholders, “Silicon Valley is coming.” Banks’ cost of capital is typically 50 basis points or less. ” Can banks out-compete the disruptors?

Banking 14
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Why the 21st Century Will Belong to Family Businesses

Harvard Business Review

As a result, family equity can come at a very low cost of capital, where businesses can meet the annual needs of their shareholders without having to worry about paying back the principal. As one client told me, “It used to be that unhappy customers would write a letter. We have to stay out in front of our image.”

article thumbnail

The False Premise of the Shareholder Value Debate

Harvard Business Review

My minimums would be: treating employees well, having a positive impact on the environment, living within the spirit (not just the letter) of the relevant laws, and earning a return above the cost of capital. As I have written extensively , I would maximize customer satisfaction.